Are your processes fit for automation?
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
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Earlier in this series, I mentioned that we would spend some time exploring the key practical question associated with the Finance Function of the future.
We've talked about the opportunities associated with moving up the value chain, and the necessity to take a holistic view of our organizations. Above all, I've underscored the transformational potential of technology - the foundation of all of these shifts.
So how do we actually implement that change? How do we shift the burden of the repetitive 'grunt' work of finance onto software, and thereby free ourselves up to do more creative work?
The trillion-dollar question
There is one fundamental question underlying all of this: are your processes fit for automation?
To be automated, processes need to be replicable, machine-readable, and discrete. In other words, they must be standardized and rule-based in such a way as to make them 'comprehensible' and actionable by the software tasked with performing them, and they need to have clear start- and end-points.
In most organizations, you'll need to take a few steps back to approach these questions. The reality is that most businesses have very little organizational knowledge of the processes on which they rely, and even less of that knowledge is likely to be written down. But, as I've discussed at length elsewhere, to automate efficiently, we need to understand the processes that we are entrusting to software.
Many of those processes may be very simple. For example, generating regular standardized reports or dashboards can be achieved easily because the inputs and expected outputs are well-established and relatively easy to communicate. Turnkey or off-the-shelf solutions for these processes are common and often low-cost.
Bespoke solutions
But for business-specific tasks for which there is not an established framework, it's vital to think carefully about the processes themselves. Process design is at the heart of good automation practices. In considering how we can automate a task we are forced to introduce a new level of clarity, both for the sake of the software and, most importantly, to ensure visibility and understanding of the work that is being performed.
Ask yourself, then: what would it take to automate this process? How can we formulate rules to govern the way in which the task is completed? How do we guarantee the integrity of the inputs that are being used (bearing in mind that these could come from a wide range of 'sensing apparatus', more details of which are available in a previous article on good data practices)?
Customer-centricity is king
Finally, what are the outputs that we want and expect? This is a good opportunity to think about how the processes we are automating can be improved. What is it that customers and stakeholders need from these processes, and how can we achieve that? I encourage you to read the last series on my LinkedIn, in which I explored some of the fundamental principles of customer-centric data and reporting.
In short, make sure that you are consulting with the people who are going to be using these outputs to find out how value can be generated. The answer may surprise you, and it may cause you to completely revise the process itself.
This was the sixth article in my new series "The Finance Function of the Future". You can read the previous articles below.
While you await future articles you can read my latest series about the "Data to impact journey" below.
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Anders Liu-Lindberg is the co-founder and a partner at Business Partnering Institute and the owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 11,000 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger on LinkedIn with 125,000+ followers and close to 210,000 subscribers to my blog. I am also an advisory board member at Born Capital where I help identify and grow the next big thing in #CFOTech. Finally, I'm a member of the board of directors at PACE - Profitability Analytics Center of Excellence where I support the development of new analytics frameworks that can improve profitability in companies around the world.
Finance storyteller and business builder. 🏗️
1yVery useful post! Especially with everyone trying to take advantage of AI. Obviously automation is super important, but companies will mess it up with bespoke solutions and rubbish processes. The best path is people, process, tool. Speak to your people first. Fix your process with staff support and then implement a new tool Definitely a lot of opportunity out there. Thanks for the article!
I Help FP&A Teams Supercharge The Way They Forecast
1yThis is a really great topic to dive into. That up front analysis of processes is such a critical part of the puzzle.